How to use scenario planning and real options to provide a framework for manag
Table of Contents
Preface: Risk is Good and Uncertainty is the Reality! xi
Acknowledgments xxv
About the Authors xxix
Chapter 1 Strategy and Risk: Two Sides of the Same Coin 1
Strategic Positioning and Risk 6
Strategy and Risk in a Start-Up 7
Chapter 2 Executing on the Plan and Discovering New Risks 17
The Assumption of Goal Congruence and the Importance of Culture 21
Conclusion 27
Chapter 3 Which Risks to Keep 31
Strategic Positioning and Risk Governance 38
How Does Risk Management Help Close the Gap Between Strategy Formulation and Execution? 40
Conclusion: Embracing and Managing Risk 42
Chapter 4 How Do We Achieve Independent Risk Governance and Improve Performance? 47
What Do We Mean by ERM? 51
Chapter 5 Who Has the Specific Knowledge to Design the Risk Architecture? Why You Need an Independent Risk Function 61
The Strategy-Risk-Governance Process 61
Meeting the Objective and the Categorization of Risks 69
The Risk Architecture 71
Creation of a Risk Function 73
Conclusion 76
Chapter 6 Enterprise Risk Management and Competitive Advantage 79
How Does Strategy Affect Randomness? 86
Chapter 7 What Reputation Do We Want? With Whom? 91
Managing Reputation Risk 99
Chapter 8 Uncertainty, Scenario Planning, and Real Options 105
Real Options 113
Conclusion 116
Chapter 9 Risk Culture and Ethics: Can You Have Excellence and Consistency at the Same Time? 121
The Advisor-Customer Encounter 124
Control Systems, Discretion, and Ethics 127
Culture, Ethics, Performance, and Risk Management 135
Chapter 10 The Top of the Pyramid: The CEO as Integrator of Strategy and Risk and the Board as the Fourth Line of Defense 141
The CEO: The Operational Integration of Strategy and Risk 145
The Board: The Governance Integration of Strategy and Risk 145
The Board Provides More Than Oversight 146
Epilogue: Decision-Making at the Restaurant: Creating and Executing a Risk-Aware Strategy 151
Appendix I: Risk Transformation and the Need for an Integrated Risk Approach 157
Appendix II: Resiliency 161
Bibliography 167
Index 183
